Nigeria has emerged as the top fourth contributor to intra-Africa trade behind South Africa, Cote d’Ivoire and Egypt for 2023, a report by the Africa Export-Import Bank has disclosed.
The Africa Trade Report 2024, titled ‘Climate Implications of the AfCFTA Implementation,’ disclosed that Nigeria’s intra-Africa trade decreased in 2023 by 2.1 per cent to $8bn from $8.2bn in the previous year.
“This led to a marginal decline in the country’s share of total intra-African trade in 2023, decreasing to about 4.2 per cent from 4.4 per cent in 2022. Notwithstanding, Nigeria remained the fourth-largest intra-African trading nation that year. Around 5.1 per cent of Nigeria’s exports are directed to African countries, with Cote d’Ivoire, South Africa, and Senegal emerging as the top three destinations for Nigerian exports within the continent. Nigeria’s imports from the rest of the continent remained relatively low, constituting less than 2.9 per cent of its total imports,” it stated.
According to the National Bureau of Statistics foreign trade report for the last quarter of 2023, Nigeria’s top five trading partners in terms of import were Singapore with goods valued at N5.09tn or 36.09 per cent, China with N2.06tn or 14.61 per cent, Belgium with N1.14tn or 8.09 per cent, India with N908.59bn or 6.44 per cent and the United States of America with goods valued at N512.99bn or 3.64 per cent.
The value of imports from the top five countries amounted to N9.72tn.
In 2023, the value of intra-African trade increased by 3.2 per cent to $192.2bn compared with the 10.9 per cent growth rate recorded in the previous year.
The Afreximbank report also estimated the export potential for intra-African trade to have surpassed $69.4bn in 2023.
“This projection holds the potential to substantially elevate the current level of intra-African trade to US$261.6bn, hypothetically constituting 36 per cent of total intra-African trade, assuming all other conditions remain constant.
“The products exhibiting the greatest export potential from Africa to Africa encompass machinery, electricity, motor vehicles and parts, food products, minerals, beauty products, chemicals, plastic and rubber, ferrous metals, pearls and precious stones, and fertilizers,” it declared.
The report noted that the implementation of the African Continental Free Trade Agreement since it came into force on January 1, 2021, boosted intra-African trade in 2023.
AfCFTA is a trade agreement based on legally implementable and reciprocal tariff schedules and concessions, with agreed rules of origin and customs documentation within Africa.
In 2023, three more countries ratified the agreement, bringing the total to 47.
The seven countries yet to ratify it are Benin, Liberia, Libya, Madagascar, Somalia, South Sudan, and Sudan.
Eritrea remains the only African Union member state that has yet to sign the agreement. Negotiations on the Protocol on Trade in Goods achieved significant milestones in 2023. To date, 48 tariff concessions have been submitted by countries, representing 87 per cent of African Union membership.
Meanwhile, the report indicated that Nigeria was at risk of shedding $30bn from its gross domestic product over divestment from fossil fuels.
Amid concerns about climate change and the need to reduce fossil fuel usage, Afreximbank was worried about the impact, because a majority of African countries depend on fossil fuel sources to meet their basic energy needs and as a source of export revenue.
“For major oil exporting countries, including Algeria, Angola, Equatorial Guinea, Gabon, Nigeria and Congo Republic, fossil fuels also represent the main source of export earnings and fiscal revenues, job creation, fossil-based power generation/supply and powering fossil intensive industries. For instance, divesting from fossil fuel could reduce GDP by as much as $30bn in Nigeria, $22bn in Algeria, $19.3bn in Angola and $190bn for the continent as a whole,” it remarked.
